MM with taxes Sunshine Trading Company (STC) has an expected EBIT of $20,000 in perpetuity,...
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MM with taxes Sunshine Trading Company (STC) has an expected EBIT of $20,000 in perpetuity, and a tax rate of 40%. Interest rate on STCs $45,000 debt is 8%, and its WACC is 10%. Blackstone Inc (BI) is an all-equity firm, which is identical to STC, except for the capital structure. What is the rate of return on STC shares?
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